Hello friends, how are you all? My name is Shreyas Gupta
and I welcome you to a new lecture of Income Tax.
We were discussing about the head of income of house
property. We finished that in the last lecture.
And today we want to take this discussion forward and move
towards the next head of income.
Friends, before moving towards the next head of income, I
want to tell you one thing.
Friends, remember that the one who has no one in his life,
he is God.
You must have heard this many times that whenever you are
struggling in life and no one supports you, then suddenly
something happens that miracles start happening.
When all the doors are closed, then suddenly a door opens
that is so high that it ignores all the doors that are
closed.
And it opens a new direction in your life.
That is why I say, never be disappointed. Always keep your
confidence high.
Age is nothing but knowledge and confidence. You are going
to move forward in life because of this.
So, as I said, the one who has no one in his life, he is
God.
In the same way, the people of Income Tax also liked this.
See, I am such a famous person that whatever I say, the
people of Income Tax follow it.
And after listening to this, they made a new head of income.
And the name of that head of income is income from other
sources.
Yes, friends, income from other sources.
We had five heads of income.
What were they? Tell me.
You idiots, tell me.
First of all, salaries.
After that, house property.
Capital gains.
Business profession.
And the fifth is other sources.
Friends, it is known from the name that salary will go in
the head.
If you do any business, then it is known that it will be
taxable in the head of business and profession.
If it is your rental work, you receive rent.
On that, your tax will be in the house property.
You bought a house, sold it after 2-3 years.
Now you have an income of capital gain.
It will go in the capital gain.
So what is left?
Majorly, there are only 3-4 sources to earn an income of
any person.
Is there any source of income other than that?
Right now, while watching the class, a child will think,
Sir, tell me one thing.
We have heard that there is a lot of money in the share
market.
There is a person who has bought some shares.
And at the end of the year, the company has given him a
profit rupee dividend.
So where will that dividend income go?
So your question is very good.
Because the other 4 heads are not in the salary, business,
house property,
If it does not go in the capital gains, then where will it
go?
Then a vagabond boy came and asked me,
Shreyas sir, you are an educated person, a chartered
accountant.
You tell me one thing.
I played gambling somewhere in the past few days.
I did gambling.
And from that gambling, I earned 3 lakhs.
And I want that 3 lakhs,
I want to show that 3 lakhs in my number 1 income.
I want to pay tax on that income and show it in my number 1
income.
So in which head will I put my gambling income?
Gupta sir, what are you talking about in your class?
Sir, right now I am going to talk more.
Tell me one thing.
You must have seen in movies, there is a horse race.
If you earn some money from the horse race, you win, you
bet.
And you win from the horse race.
Winning from horse race.
In which head will you like to show that income?
In salary?
In house property?
There is no question.
Is it your business?
Do you go daily to bet money in the horse race?
Is it your business to bet money in the horse race?
Where will you put it?
All these problems were going on.
So keeping all these things in mind, the creators of Income
Tax Act, they made a new head of income.
Its name is Income from Other Sources.
They told some specific incomes, which will go only in
other sources.
And for the rest, they said, the one who does not have
anyone, who does he belong to?
So the income which has no parents, the income which does
not make sense, which head should we put it in?
We will put it in other sources.
Come friends, let us see some types of income, which
becomes taxable in other sources.
I would like to focus your attention on the screen.
See this, friends.
Dividend income, this goes in other sources.
Casual income, like you played lottery, you won money in
races, you won money from gambling, you did betting, you
got money from it.
So this will become taxable in other sources.
The third point I would like to hold,
I will explain it to you separately.
Coming to the fourth point,
Interest received on compensation, deemed to be the income
in the year of receipt.
If the government, as they say, my property is in check,
what does this mean?
If the property is in check, it means that the government
was digging a road from there, or was doing some
development work, and your property was coming right in the
middle of that road.
So the government buys that property from you compulsorily,
and you get some money from it.
But sometimes, friends, it happens that it takes a little
time to get the money.
When the government takes a little time to give you the
money, then obviously, it will give you a sum of that time.
We will call that sum interest.
What is interest on?
On the compensation you were going to receive.
So you get interest.
Now that interest, that will become taxable in other
sources.
This was the fourth point.
On the fifth point, it says that advance forfeited due to
failure of negotiations for transfer of capital asset.
You may not understand this.
I will try to explain it to you.
Friends, what does this point mean?
Have you ever seen a property deal?
Have you heard about it?
If you have seen it, then very good.
And if you haven't seen it, then even better.
Because now I will explain it to you.
I am discussing this point.
See this.
And I want to say that this point is the income of other
sources.
Now see what is this thing?
Advance forfeited.
It means that when you buy a property from someone or go to
sell a property, and you have a deal that
I am going to sell a certain property for Rs.
50 lakhs.
The other party agrees.
Thank you very much.
It is very good that you are selling me this property for
Rs.
50 lakhs.
Then what do I say to him?
I am selling it.
But what is the guarantee that you will complete the
paperwork within three days or three weeks?
Suppose you waste my time and leave and don't come back.
Then that person says that let's do one thing.
I will give you an advance of Rs.
5 lakhs for this property worth Rs.
50 lakhs.
And the remaining Rs.
45 lakhs
I will pay you in installments.
Now keep this Rs.
5 lakhs as an advance.
Keep it as a down payment.
In the dealing of a property, someone calls it visible,
someone calls it not visible, and we call it token money.
And here they have written advance money.
Suppose you take that advance of Rs.
5 lakhs and
Rs. 45 lakhs is pending.
Suppose that person never came back to buy that property.
Something happened that he had to leave the country and run
away at night.
And he never came back.
Now what will happen?
That Rs.
5 lakhs remained with me and I accepted it.
Where will that income go?
It will go to other sources. it will be accepted.
That was the point.
Let's move on.
No fear, no worry, no tension.
Friends, there are some incomes, as we were discussing,
sometimes it is the business of letting out on the rent.
If your business is that I give my machinery, my plant on
rent, it is a business.
What am I saying?
It is your business.
So where will its income go?
In business and profession.
It won't come here.
Is the point clear?
But sometimes it happens that it is not my business.
Actually, I am a salary class person.
And I feel that if I have an empty house, why shouldn't I
let it out on rent?
It was not my business.
I let it out on rent casually to earn some money.
So the rent I will receive will be the income of my other
source.
That is what is written.
That is the point.
See this C point.
Because it is not in business.
If it was in business, my business would have been to let
it out on rent.
If my business is this, then the income of my other source
will be mine.
This is the point.
Sir, tell me one thing.
There is a doubt.
I said, yes, ask.
Sir, I was looking at my bank passbook the day before
yesterday.
I said, that is a very good thing.
What did you see in it?
Sir, they had given me annual interest.
The bank had given me interest.
I said, okay.
What did you get the interest on?
He said, it is a saving bank.
It is a savings account.
I got interest in that.
The interest I got was also my income.
Where will it go?
I said, think, where will it go?
Is it in salary, house property, capital gain, business?
Any scope?
He said, no.
I said, if you do not understand, it is simple.
It is FD.
I got interest of FD.
Put it here.
It will be taxable here.
Sir, the interest of saving bank and FD is also taxable.
Sir, this is the Indian Government's
Income Tax Act.
You will not be able to understand how far they have made
that act that you will not be able to save any income of
yours.
They have made such provisions.
Still, people steal the income tax.
When your lecture will be over, you will also be made to
remove the loopholes yourself.
So, I have given you a list of some incomes that are
taxable in other sources.
Sir, sir, sir, Mr. Gupta.
One second.
Where are you running?
I am standing right here.
Sir, tell me one thing.
A few days ago, you also said that we also reduce some
expenses.
When I used to pay interest, I used to reduce it.
I said, yes, it is absolutely right.
Sir, you said in Business and Profession that my profit,
which is my income,
I reduce some of my expenses so that I get my profit.
I pay tax on it.
Basically, the expenses that I spend to earn income,
I will reduce it from that income.
Sir, for example,
if my work is, for example, royalty.
By royalty, I mean that I have written a book.
To write that book,
I have spent Rs. 50,000.
I bought a paper,
I bought ink, I made a printer, and that book was ready.
Now, I go to the market and sell that book.
Or I have sold that book to a publishing house and I have
sold my copyright.
Take Rs.
3,00,000 and all the rights are yours.
No matter how you publish this book and how much money you
sell it for, that is your matter.
Give me a fixed royalty.
I received a royalty of Rs. 3,00,000.
He said, okay.
Now, the government should pay tax on Rs.
or pay tax on Rs.
3,00,000 by reducing it to Rs.
Think and tell me.
The income of Rs.
3,00,000 was not made in the air.
It did not come from the air.
To earn the income of Rs.
I have spent Rs. 50,000.
If I had not spent that money,
would that income have been made?
If I had not bought a paper, if I had not bought ink, if I
had not bought ink, would I have been able to write a book?
If I had not been able to write a book, would I have
received the royalty of that book?
If I had not received it,
then how would I have been able to pay tax on the income?
So, this is the thing, friends.
When I take the income,
I will also reduce some of the expenses.
This is the thing.
Like we were talking about dividends.
For a dividend, you will need to buy a share.
And to buy a share, you need money.
Where will you get the money from?
Either you have your own money, then it is not a problem.
Then you have not spent anything.
You have a capital.
You had money.
You bought a share from it.
But it is also possible that you do not have money.
You have taken a loan and bought shares.
What is the cost of that loan?
The interest that you will pay, that will be your cost.
What will you earn from the share?
Dividend income.
What will you minus?
Interest.
So, the net income will be taxable in other sources.
It is a simple thing.
Say yes.
No fear.
The brother has come.
He will make you understand.
My light is moving again and again.
Forgive me.
So, this is the point, friends.
If there is a dividend, then the deduction of interest, the
expense of interest, if you have taken money on interest
and bought shares, then you will get the deduction of that
interest.
But how much? 20% of the income.
20% of your dividend maximum will be the expense here.
You get interest on securities.
You have bought debentures.
You receive the income of interest on them.
That is the income of your other source.
And what will we have to do from the minus?
Some commission, some brokerage.
Any of these small expenses, you can do minus from it.
Like I was telling you that the machinery that you have
given on rent, if the machine is given on rent, then there
will be some depreciation also.
The yearly wear and tear of that machine is also an expense.
So, from the income of rent,
I will minus my expense.
If I give any insurance,
I will minus its premium.
And the net income that will be left,
I will give tax on that.
See, income tax.
Pay attention to the word.
Income tax.
The income that you are getting, you are not taking it on
the revenue.
You are not taking it on what you have earned.
Ultimately, what are you taking home?
How much did you spend?
What income did you generate from that expense?
And ultimately, the money that you are taking home is the
income.
Tax will be imposed on that.
Always keep this concept in mind in any head of income.
See this.
If you receive a family pension, one third of such income
or 15,000 rupees, whichever is less.
And as I was saying, if you get land in Chakbandi, and
after a few years, you get money from the government and
the government gives you interest.
So, what is that interest?
That interest is your income.
It is your receipt.
And what do you have to spend?
We are giving you 50%.
We are assuming that you spent 50%.
If you receive a pension of 15,000 rupees, and we are
asking you to reduce 50%, then ultimately, my tax will be
imposed on 50,000 rupees.
This was it, friends.
But if an SSC spends his personal income, we will not give
a deduction for that.
We will only reduce the amount that was spent to earn that
money.
This is it, friends.
This was the point, friends.
Now, see.
This casual income,
I will cover in the next lecture, friends.
I explained to you the basics of other sources.
We will discuss the rest in the next lecture, friends.
We will end this lecture here.
Thank you very much, friends.
Take very good care of yourself.
Thank you very much.